The Effects of Strategic Orientations and Perceived Environment on Firm Performance

Farkas Gergely

Abstract:
Among micro, small, and medium-sized firms located in Hungary, I conducted a survey examining
the effects of entrepreneurial and learning orientations, and that of perceived environment
on firm performance. I studied the perceptions of environmental turbulence and environmental
hostility. Three dimensions were examined both in the case of entrepreneurial orientation (i.e.,
innovativeness, proactiveness, and risk taking) and in the case of learning orientation (i.e., commitment
to learning, shared visions, and open-mindedness). The effects of such dimensions on
firm performance were analyzed with the path analysis (PLS-SEM) method. In the course of the
research, firm performance was divided into three dimensions: efficiency, growth, and profit.
The possible effect of available financial resources was also taken into consideration. Results
show that the availability of financial resources is relatively important, although it is connected
only to the growth dimension of performance. Strategic orientations should be interpreted as
multi-dimensional, and they have an effect on different performance dimensions. The research
was cross-sectional and has implications for long-term strategic decisions.
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